Aug. 5 (UPI) — Japanese tech firms that rely on South Korea-made memory chips for processing and organic light-emitting diode panels, or OLED, are at risk of slowdown due to Tokyo’s restrictions against South Korean firms.
The Japanese government’s move last week to remove South Korea from a “white list” of preferred trading partners spells trouble for corporations like Sony, sources in the multinational electronics industry say, according to South Korean news source Chosun Biz.
The adverse side effects of Japanese retaliation against South Korea, following the shutdown of a bilateral comfort women’s foundation and South Korean court orders to compensate Korean victims of forced labor, are unveiling the tightly interwoven tech supply chain that binds the two countries.
Firms like Sony are likely to be affected because of South Korean dominance in the memory chip market and OLED.
Two South Korean firms, Samsung Electronics and SK Hynix, comprise 72.6 percent of the global DRAM market.
A semiconductor firm source told Chosun Biz companies like Sony can turn to other suppliers, including U.S. firm Micron, but restrictions against South Korea could still hurt Japanese companies.
“Micron Technology produces GDDR [graphics double data rate] memory, but without South Korean sources, no company can properly procure DRAM supply,” the source said.
Sony’s flat-screen televisions are also likely to be affected; South Korean firm LG Display is the exclusive manufacturer of OLED panels for large televisions, and Samsung Display accounts for 76.3 percent of the 8K-resolution liquid crystal display, or LCD, market.
The dispute with Japan has preoccupied Seoul and is dominating the national agenda despite North Korea‘s multiple weapons tests last week.
News 1 reported Monday President Moon Jae-in said Japan will not stop South Korea’s economic rise, and that the latest trade restrictions will “only stimulate” South Korea to become more competitive.
Last week foreign ministers of both sides failed to reach a resolution on the trade dispute at a regional security forum in Thailand.